Interim Results

FOR IMMEDIATE RELEASE 28 February 2011

Kea Petroleum plc

("Kea" or the "Group")

INTERIM RESULTS FOR THE PERIOD ENDED 30 NOVEMBER 2010

Kea Petroleum plc (AIM:KEA) is pleased to present its inaugural Interim Results for the period ended 30 November 2010 (there is no comparable period).

Operational Highlights

·; Kea announces intention to farm in and drill two exploration wells during the coming half year

·; Kea expedites 3D seismic on Mercury Prospect - a highly prospective oil play

·; Extension of Methanex alliance

·; Methanex actively reviews opportunities to drill exploration wells jointly funded with Kea and backed by long term gas off take agreements

·; Wingrove expected to be in production during next quarter

·; Purchase of shallow drilling rig to facilitate shallow drilling programme

Financial Highlights

·; Over £16m of cash held at balance sheet date

·; Loss before tax: £1.1m 

·; Loss per share: 0.42p

Chairman, Ian Gowrie-Smith said:

"It is exciting that Kea now stands at the cusp of turning from explorer to producer. Commencement of Wingrove production and the anticipated drilling at two wells, on new prospects to which Kea hopes to farm in, during the coming months should see a return to the kind of pace with which Kea started 2010. Our relationship with Methanex is exceptional and it is most likely that this partnership will see some drilling this year on one or more of our New Zealand prospects."

For further information please contact:

Kea Petroleum plc Tel: +44 (0)20 7340 9970

Ian Gowrie-Smith, Chairman

David Lees, Executive Director

RBC Capital Markets Tel: +44 (0)20 7653 4000

Matthew Coakes / Daniel Conti Martin Eales (NOMAD)

Buchanan Communications Tel: +44 (0)20 7466 5000Tim Anderson / James Strong

CHAIRMAN'S STATEMENT

The recent and continuing climb in oil prices and the growth of LNG / methanol production and consumption, make Kea's continuing moves to acquire large areas of prospective acreage particularly well timed.

The most significant development during the last six months has been the formal extension of our relationship with Methanex New Zealand Limited, a subsidiary of the Methanex Corporation of Canada ("Methanex"), wherein all Kea's prospects are now jointly the subject of an exhaustive internal and external review. The objective is to prioritise a drilling programme to give both companies the best risk/reward ratio.

The Beluga prospect, on Kea's permit PEP 51155, has been subject to a great deal of analytical work over the past six months, in conjunction with Methanex. The consensus view is that the Tariki sands which were intersected while drilling Beluga 1 are likely water saturated at the well location. This supports the Company's decision at the time of drilling to suspend the hole rather than attempt to flow test it at some considerable cost. It is unlikely that the Company will pursue the remaining potential for the Tariki sands on PEP51155. Of a more positive reflection, though, is that there remains good potential for commercial quantities of gas in stacked pay in the lower Mangahewa Sands; and it remains a strong possibility that the Company will drill a new deviated well, Beluga-2, from the current site, to test this . The timing of such well is dependent on the priority given to other prospects, and also the constraints on rig availability.

The plan to bring the Wingrove discovery, on Kea's permit PEP 51153, into production by end of February 2011 has unfortunately not been fulfilled as yet due to ongoing delays in delivery of specialist, custom-made equipment, from Canada. Most of this equipment has now arrived on site and the balance is now expected within a month. This has had a knock on effect in delaying assessing a number of Mt Messenger style prospects, including further drilling from the Wingrove site. It has been considered prudent to wait for the results of production testing of Wingrove-2 before embarking on appraisal drilling of this oil discovery and other similar prospects. A further constraint has been the lack of availability of a suitable rig. Whilst there are a number of rigs that can drill these relatively shallow prospects, most of the existing rigs in New Zealand are too large and therefore too expensive. The Company is pleased to announce that it has recently jointly purchased a Titan DG2500 truck mobile rig, which should be ideal for completing such wells for production and drilling similar shallow targets, in association with Webster Drilling and Exploration Ltd.

The Felix Prospect, in licence area PEP 381204, has had significant additional analysis and the Company plans on drilling this prospect later this year. The hole will be drilled from onshore and deviated offshore and will intersect several targets in addition to the principal target being the Eocene Mangahewa Sands which are the producer reservoirs in Shell's nearby Pohokura Field. Kea is in active discussion with Methanex on the precise location of the well and a decision is likely within the next couple of months. Regardless of whether Methanex decide to partner in drilling Felix, Kea has already decided to drill this prospect, by itself or in association with suitable farm-in parties. The Company has now spent a considerable amount of time and energy on selecting possible drill sites, and in negotiations with land owners for access agreements.

On the highly prospective Mercury area, in permit PEP 52333, which was once assessed by Shell as having the upside potential to have over 400 million barrels of recoverable oil, Kea is pleased to advise that it has recently reached agreement with Singaporean company STP Energy to complete a joint 3D seismic survey over the Mercury Prospect and their adjacent discovery area in the very near future. This programme will be well ahead of requirement under the terms of the permit lease, which reflects the Company's enthusiasm for this prospect. The Board believes that Mercury could be drilled as early as next year.

Vintage seismic on the Manta Prospect located in recently granted offshore permit area PEP52200 has now been completed, with encouraging results for this high upside play, with further seismic acquisition being considered.

A number of Kea's onshore and near shore prospects depend heavily on rig capabilities not presently available in New Zealand, which can be capable of drilling substantial deviated and horizontal holes. Many of the sites we are looking to drill from are access-constrained or site-challenged. Additionally, where they are offshore we may wish to drill deviated holes from onshore. Consequently the Company, in partnership with Webster Drilling and Exploration Ltd., is presently evaluating the purchase and importation of another suitable rig.

As advised in the Chairman's Statement in the Annual Report and Accounts for the period to 31 May 2010, the quantity and timing of the Company's drilling program in New Zealand was dependent on "the deliberations by New Zealand's Ministry of Economic Development (MED) over certain critical approvals". Whilst a number of approvals were granted in Kea's favour, the critical approval being sought was for the Company to be granted a licence to the Kahili Block, an area which borders Kea's licences PEP51153and PEP51155. Kahili was a former producing gas field and in the view of the Directors, the new licence should have been awarded to Kea. The impact of that decision was that Kea no longer had a ready-to-drill target with which to initiate its joint drilling programme with partner Methanex.

As a consequence of this disruption to its planned drilling programme, Kea has broadened its search for drill-ready prospects to onshore Australia and in the Timor Sea area off the coast of Northern Australia. In respect of onshore Australia, the Company expects to farm in and drill two different prospects in the coming months. Both prospects fit in the Company's target profile as they are near existing production, relatively shallow, and can be brought into production quickly in the event of discovery. They will not impact seriously on the Company's present financial resources. One of the prospects is an oil opportunity and the other a gas target near existing infrastructure.

Kea has also taken the opportunity to strengthen its technical team, in readiness for an active programme which it expects to start shortly. The setback of not being granted the Kahili Block is now behind us; and we now have a planned programme of drilling starting within the next three months in onshore Australia. Concurrently, we will be beginning our 3D seismic survey over the Mercury Prospect, will commence site access work for Felix, and will assess drilling rig options for Felix and other drilling targets for later this year and early 2012.

At balance sheet date Kea had cash balances of almost £16 million sterling equivalent, sufficient to cover its current lease obligations in New Zealand and the planned onshore commitment in Australia.

Ian Gowrie-Smith

Chairman

 25 February 2011

KEA PETROLEUM PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

The loss for the period and total comprehensive loss for the period are 100% attributable to equity

shareholders of the parent undertaking.

The accompanying accounting policies and notes form an integral part of these financial statements.

KEA PETROLEUM PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The financial statements were approved by the Board of Directors on 25 February 2011

P. Wright

Director

KEA PETROLEUM PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

KEA PETROLEUM PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

KEA PETROLEUM PLC

Notes to the Interim financial statements

for the SIX MONTHS ended 30 november 2010

1. Basis of preparation

This interim financial information has been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The accounting policies, methods of computation and presentation used in the preparation of the interim financial information are the same as those used in the Group's audited financial statements for the period ended 31 May 2010.

The financial information in this statement does not constitute full statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial information for the six months ended 30 November 2010 is unaudited. The comparative information for the year ended 31 May 2010 was derived from the Group's audited financial statements for that period as filed with the Registrar of Companies. It does not constitute the financial statements for that period.

2. Loss per share

The diluted loss per share does not differ from the basic loss per share as the exercise of share options

would have the effect of reducing the loss per share and is therefore not dilutive.

3. Share capital

4. Events after the balance sheet date

In December 2010 Kea signed a Heads of Agreement with Methanex to establish a broadly based alliance to facilitate exploration in the Taranaki Basin.

In January 2011 Kea issued 12 million options at 12p per share under the unapproved share option plan for the benefit of various employees.